Item 12.2 - Attachment 2

Minutes of Audit Committee 25 February 2010







Mr Neil Adams in the Chair, Mike Barry, Councillor J D Finn (arrived 7.02 pm) Councillor M McDermott and Councillor A Wilson (arrived 6.49 pm).




Denis Banicevic – External Auditor, Grant Davies – Minute Clerk, Maurice Doria – General Counsel, Alistair Cochrane – Manager Finance (retired 7:30 pm), Mr Scott Gregg – Development Director Civic Place (arrived 6.51 pm and retired 8.02 pm), Dr Robert Lang - Chief Executive Officer and Emily Tang – Service Auditor.




An apology was submitted by Mr Greg Smith – Group Manager Corporate Services.





There were no conflict of interest declarations at this meeting.






The Committee noted the recent resignation of Mr Michael Quirk and acknowledged his substantial efforts and contribution to the Audit Committee. The Committee wished Mr Quirk well in his future role.


In addition, the Committee welcomed Emily Tang – Service Auditor, who would be attending the Audit Committee pending the replacement of Mr Quirk.


Mr Maurice Doria added that the position description for the Manager, Service Audit and Review had been reviewed and minor changes made to ensure the position was focussed on the audit function. It was planned that the position would be advertised in the near future.










1/10         RESOLVED                     (Wilson/Adams)




That the Chief Executive Officer report on the possibility of appropriate confidential matters such as incidents of corruption, Code of Conduct issues and complaints being reported to the Audit Committee.




Councillor A Wilson (6.49 pm), Scott Gregg (6.51 pm) and Councillor J D Finn (7.02 pm) arrived at the meeting during consideration of this matter.




02/10       Audit Committee Minutes – 26 November 2009


                 RESOLVED                     (Barry/McDermott)


That the minutes of the Audit Committee Meeting held on 26 November 2009 be received and accepted as a true record of the meeting.




An update was provided on the following Action Items as arose at the previous meeting:-


Action 2 – Compliance with Council Resolutions

Matter listed as Item 7 on tonight’s agenda.


Action 10 – Workshop on Contract/Procurement Review

The workshop details are not available as yet so this item to remain open.


Action 11 – IT Systems Contract

Matter listed as Item 8 on tonight’s agenda. A report is available for distribution to members.


Action 12 – Statistical Report on ICAC Reports, Protective Disclosures and Section 11 reports etc

The information is not available as yet and will be provided to the next meeting of the Audit Committee. This item to remain open.


Future Meeting Dates (Minute 24/09 refers)

The Chairman sought advice as to whether there was any flexibility in relation to the Special Meeting date proposed for 7 October 2010 due to his need to attend to a personal engagement.


The CEO noted difficulty arose in meeting the deadline for the Council Meeting agenda should any substantial meeting delay occur.


ACTION 17 – Possible Change of Special Meeting Date


An alteration to the Special Audit Committee date proposed for 7 October 2010 to the Thursday before or after be explored.





03/10    Civic Place Risks

              Mr Scott Gregg, Development Director Civic Place, provided a brief outline on the Civic Place process to date, including the litigation process which ended in a defeat by Council in the High Court and subsequent changes to legislation.


Council had subsequently held a workshop in May where a number of parameters were set down for agreement with Grocon. By October an agreement had been reached with 2 minor amendments concerning a changed delivery date (December 2013 – accepted by Council) and a small negative financial impact on Council. The financial position was subsequently reassessed resulting in a minor deterioration in debt position subject to the acceleration of the project through a staged development. Mr Gregg proceeded to outline the effects of such a staged process.


Subject to covering off the legal details associated with the above 2 items, it was considered that the risk was acceptable, with the primary risk relating to the compulsory acquisition precedent.


The Department of Local Government was currently considering whether the staged and previous development was substantially the same. (Council had already sought advice from O’Connor Marsden which had indicated that there were no probity issues).


The CEO indicated that no decision had been made to proceed with the variation as yet. Council could proceed with the variation resulting in the delivery of services at an earlier date and less of a financial impact or could choose not to proceed. The CEO considered that Council’s biggest risk was not proceeding with the project.


It was further noted that:-

·    The Department of Planning would be the consent authority;

·    Council had prepared a risk matrix and the document was being updated.




RESOLVED              (Barry/Adams)




That an update on the current risk assessment for Civic Place be provided at the next meeting of the Audit Committee.



That the Chief Executive Officer consider soliciting comment on Council’s risk assessment document from the constructor, Grocon.



Alistair Cochrane retired from the meeting at 7.30 pm during consideration of this matter.


04/10    Report of Internal Audit Activities

A copy of Manager, Service Audit and Review Memorandum dated 18 February 2010 outlining the report of the Internal Audit Activities as at 18 February 2010 had previously been circulated to members.



Mr Scott Gregg retired from the meeting at 8.02 pm during consideration of this matter.



Procurement Audit

Neil Adams noted that the Procurement Audit had been delayed and sought advice as to why the scope of the audit had been enhanced.


The CEO indicated that initial investigations had revealed an extremely large number of suppliers and accordingly it had been decided that an increased sample would be required. The audit was near completion and the results would be available at the next meeting.


Investments Audit

Neil Adams sought advice on the delay in the Investments Audit.


Ms Tang responded that due to the complexity of the investment requirements and the departure of the Manager, it was planned for the audit to be contracted externally.


Mr Banicevic noted the 40 mandays seemed excessive to carry out such an audit as much of Council’s investments were term deposits and Council’s investment policy was very conservative. He suggested the investigation should focus more upon Council’s borrowing exposure.


The CEO responded that mandays referred more to duration rather than actual working days.




That the Investments Audit be deferred pending the appointment of the new Manager, Service Audit and Review and upon his appointment, the officer reassess the risk profile and adjust the program accordingly.



Cash Control – Swimming Pools – Additional Audit Commenced

Mr Adams questioned whether the additional audit had been prompted by a particular event.


The CEO responded that a review of cash controls had been carried out previously where a number of concerns had been raised. The concerns were addressed and the additional audit was simply to ensure that all was now proceeding well.


Council’s Online Syndicate Audits

Mr Banicevic noted that the subject audit had been varied. He suggested that the audit was no longer relevant if Council was replacing its IT systems.


The CEO agreed and suggested that ‘ceased’ may be a better description for the audit rather than ‘varied’.


Council Resolution Compliance

Councillor Finn disputed the results of the Council Resolution Audit and considered that a sample of 10 was too small.


Councillor Finn further sought a detailed breakdown of the data pertaining to the implementation of Council resolutions in a timely manner together with advice on what actually was considered an ‘actioned’ resolution.


Councillor Finn suggested that Councillors could be notified when actions were ‘closed off’.


Councillor McDermott agreed, referred to a motion pertaining to Christmas Decorations and noted that portions of resolutions seemed to be ignored.


The CEO outlined the process undertaken in the audit and added that a table of data would be supplied. He further added that resolutions were certainly not ignored.


Action 20


That the issue of Council Resolution Compliance be revisited as a matter of priority by the new Manager, Service Audit and Review, once appointed, with a view to addressing the broader issues raised by Councillors to ensure performance meets the expectation of Councillors.


Further, that a report be provided on this issue to a future meeting of the Audit Committee.




5/10         IT Systems Replacement and Contract

A copy of Group Manager Corporate Services Confidential Report as considered at the Council Meeting held on 24 August 2009 was distributed to all members. The report outlined developments in the Council’s Online Contract, with paragraph 11 outlining the relevant financial details.


The CEO noted that a Project Manager had been appointed for this contract and the incumbent would be reviewing and refreshing the figures contained in the report over the next month.


RESOLVED              (McDermott/Barry)



That an update of the information contained in paragraph 11 of Group Manager Corporate Services Report be provided to the next meeting of the Audit Committee.



 6/10        Proposed Changes to Committee Charter      

Manager, Service Audit and Review Memorandum dated 18 February 2010 regarding proposed changes to the Charter had previously been circulated to members.


A general discussion was held on the possibility of each independent representative having access to the Internal Auditor. It was subsequently agreed that the Charter remain as is, with private meetings between the Internal Auditor and the Chairperson being permitted.


RESOLVED              (Barry/McDermott)


(a)       That the proposed amendments to the Audit Committee Charter as outlined in the Memorandum dated 18 February 2010 be adopted subject to the following changes:-

1.         That the composition of the Audit Committee remain as 2 independent persons and 3 Councillors with the Chair to be an independent member as elected by the Committee.

2.         That the reference to all Councillors being entitled to attend meetings be deleted

3.         Further, that Councillors’ and Senior Staff participation be sought at meetings, as necessary, on specific items.

(b)       Further, that a copy of the final draft Charter be provided to the Chairman for review prior to being sent to the Council for consideration and approval.




7/10         Depot Management Improvement Program

Councillor Wilson advised that there had been much progress made in relation to the Depot.


The Committee noted the comprehensive update which had been provided at the previous meeting (Minute 22/09), a further copy of which would be sent to Councillor Wilson.



8/10         Next Meeting

                 The next meeting of the Committee is scheduled for 27 May 2010.



The meeting terminated at 9.02 pm.